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Prices of whisky imported from EU much inflated

Yonhap, Seoul

Prices of whisky imported from EU much inflated

10 June 2012

SEOUL (Yonhap) — Domestic prices of whisky imported from the European Union (EU) are five times more than their import costs despite last year’s implementation of a bilateral free trade deal that cut tariffs, a consumer advocacy group said Sunday.

The local price of 15 Scotch whisky brands amounts to 5.1 times the import cost on average, signaling importers and distributors rake in exorbitant profits, according to Green Consumers Network in Korea.

Local importers pay 2,664 won (US$2.27) for 100 milliliters of Scotch whisky and sell it to distributors for 8,376 won, while consumers fork out 13,501 won, the group said.

Most of the whisky importers are local subsidiaries of foreign manufacturers that have a monopoly on the distribution of imported whisky brands in the domestic market, it said.

Meanwhile, import prices of EU whisky rose 1.41 percent on-year in the first quarter of this year, though import duties were cut to 15 percent from 20 percent under the free trade agreement (FTA), the group said.

The FTA, which went into effect in July last year, calls for Seoul and Brussels to eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect.